D.C. Council Repeals Wage Bump for Tipped Workers, Will of Voters Be Damned

Washington, D.C., lawmakers voted 8 to 5 on Tuesday to repeal a voter-passed ballot measure known as Initiative 77—the will of their constituents be damned.

Initiative 77, which received 55 percent of the vote in the June primary election, would have gradually raised the minimum wage for tipped workers in the District, starting with a modest increase on October 9, eventually reaching parity with the city’s minimum wage in 2026. Currently, employers are allowed to pay tipped workers less than the District’s $13.25 minimum wage, so long as their tips make up the difference.

The council’s vote snuffed out, at least temporarily, what had become a major flashpoint in local politics, one that pitted restaurant owners, restaurant lobbying groups, and high-earning servers and bartenders against worker-advocacy organizations and lower-earning tipped workers.

In a 16-hour public hearing in September, opponents of Initiative 77 warned that the measure would deal a fatal blow to many local restaurants struggling with already razor-thin profit margins, forcing layoffs and higher menu prices for customers. Supporters argued that doing away with the city’s current two-tiered wage system would offer more stability to lower-earning tipped workers who live from one erratic paycheck to the next in a high-cost city. The initiative, according to supporters, would also help mitigate the damage to workers caused by race-based tipping discrimination, sexual harassment, and wage theft, all rife in the industry.

Ultimately, the council came down in favor of the anti-77 camp, putting themselves at odds with D.C. voters.

“While proponents of the initiative believe that overturning an initiative is anti-democratic, the committee views the initiative like any other piece of legislation,” said Council Chair Phil Mendelson, who headed the push for repeal. “If the law is a bad law, it should be amended or repealed. It does not matter if the law was adopted by the council, the voters, or Congress.”

The repeal legislation was first proposed in July, just one month after voters passed the ballot measure. Supporters of the initiative hoped then that some compromise could be reached in the following months. Indeed, compromise was the word du jour at that marathon hearing in September, with many council members voicing their interest in finding a solution that would be acceptable to all parties.

But on Tuesday, when the time came to vote on a proposed amendment, D.C. lawmakers struck it down. The amendment, proposed by at-large Councilmember Elissa Silverman, would have raised the minimum wage for barbacks, valets, and other low-earning tipped workers, but would have exempted bartenders and servers. It would have also stretched out the time period of implementation, created a hotline for anonymous wage-theft complaints, mandated sexual harassment training for managers and owners, and required businesses to use third-party payroll systems to make wage theft more difficult.

The amendment failed by an 8-to-5 margin.

Instead, Mendelson introduced his own amended repeal bill, which was the version the council enacted. Mendelson had initially proposed a flat-out repeal of the ballot measure but then edited his proposal to include nearly all the proposals in the Silverman amendment except the one that actually raised tipped wages. The politically savvy move provided cover for council members still on the fence to vote for repeal and against Silverman’s amendment.

Diana Ramirez, head of the worker advocacy group ROC-DC, labeled the Mendelson bill a false compromise and said the pro-77 camp was far from giving up the fight, leaving the door open to another ballot initiative or a recall campaign. Ramirez also hinted that groups in their coalition would endorse candidates to challenge lawmakers who struck down the initiative, when the next general election rolled around.

“There’s certainly going to be repercussions for council members who voted against their constituents,” says Ramirez.

Of the eight councilmembers who voted to repeal Initiative 77, six represent wards in which the measure actually passed, and five will be up for re-election in 2020.

“The ones who are up for re-election in two years—that’s where the fun is going to be,” Ramirez adds.

On Election Day, the strongest opposition for the initiative came from the city’s whiter and wealthier precincts, while pro-77 votes came from poor and predominantly black neighborhoods northeast and across the Anacostia River. Given the racial breakdown of the vote, critics of a repeal have labeled the move as tantamount to black voter suppression.

Councilmember Kenyan McDuffie of Ward 5, which is majority black and ranks among the bottom three wards in terms of median family incomes, responded to such claims in a press release on Wednesday, presenting legislation he had sponsored in the past to showcase his progressive bona fides. But McDuffie stopped short of directly addressing the fact that tipped workers of color, who account for about 70 percent of the tipped workforce in the District but earn notably less than tipped white workers, were one of the groups that stood to benefit most from Initiative 77.

Many of the councilmembers, including McDuffie and Mendelson, said they based their vote largely on conversations they’d had with tipped restaurant workers, who turned out en masse to oppose an initiative they thought could cut their total take-home pay. They did not, however, seem to put much stock in the real-world examples of other cities that have eliminated or begun to eliminate the lower minimum wage for tipped workers, such as San Francisco or Seattle.

A September report by the Economic Policy Institute used American Community Survey data to analyze the effects of eliminating or beginning to phase out the tip credit in both cities (in Seattle’s case, it used data for the Seattle metropolitan area). The report found that the restaurant sector in both areas continued to grow while take-home earnings for tipped workers actually shot up.

Although higher-earning bartenders and servers averaging $20 and $25 dollars per hour were among the loudest voices throughout the tipped wage debate in the District, they are far from the majority. Servers and bartenders in the city have a median take-home of $14.41 per hour. Moreover, other tipped workers, such as shampooers, pizza delivery drivers, valets, and pedicurists, often make less.

The optics of quelling the will of the voters look even worse when considering the contributions that councilmembers opposed to the initiative have received from restaurant-industry lobbying groups.

An August report from the nonprofit consumer advocacy group Public Citizen found groups opposed to Initiative 77 gave more than $140,000 to the eight councilmembers who voted for repeal during their two most recent campaigns. That’s more than four times as much as the $30,250 that anti-77 organizations gave to councilmembers opposed to repeal.

According to the report, D.C. Mayor Muriel E. Bowser received the largest amount from the restaurant industry—more than $65,000. Bowser has said that she will sign the repeal bill.

Tax Cuts for the rich. Deregulation for the powerful. Wage suppression for everyone else. These are the tenets of trickle-down economics, the conservatives’ age-old strategy for advantaging the interests of the rich and powerful over those of the middle class and poor. The articles in Trickle-Downers are devoted, first, to exposing and refuting these lies, but equally, to reminding Americans that these claims aren’t made because they are true. Rather, they are made because they are the most effective way elites have found to bully, confuse and intimidate middle- and working-class voters. Trickle-down claims are not real economics. They are negotiating strategies. Here at the Prospect, we hope to help you win that negotiation.